The Care Quality Commission has been criticised for failing to act on concerns of residents being abused by care home staff and reducing the number of inspections to focus on registering organisations instead, a report said.

One of the key ways that poor standards of care in residential homes and hospitals come to light is through staff blowing the whistle yet the CQC shut down a dedicated hotline, the Public Accounts Committee said.

At the same time the CQC gagged its own staff when they tried to raise concerns about the Commission's work, it said.

One board member told MPs she had tired to speak publicly about her concerns over the way the CQC was run but had been "ostracised and vilified".

The report did not name the board member but it is understood to be Kay Sheldon, a psychiatrist, who gave private evidence to the Mid-Staffordshire Inquiry, into dozens of deaths of patients amid appalling standards of care.

Margaret Hodge, Chairman of the PAC, said: “It is unacceptable that staff leaving the organisation have been made to sign gagging clauses to prevent them speaking out, when their information could have been used to hold the Commission to account and force it to improve.

"This is a story of failure that goes right to the top of the organisation. The former Chief Executive has moved on but it is too soon to tell what difference that has made.”

The wide ranging report said the CQC had failed in its duty to take action where standards were not being met and 'has a long way to go to become an effective regulator'.

The CQC has been 'struggling for some time', the report said, and the Department of Health is 'only now' starting to take action.

Ms Sheldon, speaking on BBC Radio 4's Today programme, said: "We really do need a credible and effective regulator. We have still got serious problems and we need to sort that out.

"We are trying to push through major changes to the way we regulate and as a board member, I have yet to speak to anybody who thinks it is a good idea.

"What we really need now is strong, credible, independent leadership to take us forward."

The CQC was formed in 2009 under a Labour government led by Gordon Brown, taking over regulation of healthcare, social care and mental health services.

Reports from the Health Select Committee, the Department of Health and the National Audit Office have all been critical of the Commission.

The PAC report said it has been 'poorly governed and led' and 'we have serious concerns about the leadership, governance and culture of the Commission'.

Cynthia Bower, chief executive of the Care Quality Commission, resigned last month from the £195,000 a year post as a review by the Department of Health found widespread failures including a lack of evidence it protected patients, it was too reactive and inspectors missed neglect of care home residents.

Lady Barbara Young who was chairman when the organisation was set up in 2009, left after the Basildon hospital scandal in which dozens of patients were thought to have died despite the hospital receiving a 'good' rating from the Commission.

The report said: "The Commission has been criticised for being overly concerned with reputation management at the expense of transparency and accountability.

"Staff leaving the Commission have been made to sign compromise agreements containing confidentiality clauses, tantamount to gagging clauses. This Committee has expressed concern on previous occasions about the use of such clauses.

"The Department confirmed that confidentiality clauses are not in themselves prohibited, but its guidance makes clear that clauses that seek to prevent the disclosure of information in the public interest should not be allowed."

The General Medical Council has recently issued new guidance to doctors not to sign contracts that include 'gagging clauses' and reiterated that highlighting substandard care is a duty of all professionals.

A whistleblower informed the CQC about possible abuse at Winterbourne View care home for people with learning disabilities, in south Gloucestershire, but this was not followed up, the report said, and it took a BBC Panorama programme to uncover the problem.

The report said: "Since the Panorama programme in May 2011, the Commission has received approximately 2,500 whistleblowing calls, a dramatic increase on the 200 calls received in the course of a year prior to the programme.

"However, the Commission scrapped the dedicated whistleblowing helpline that the Healthcare Commission had used and whistleblowers are expected to use the general helpline number.

"The Commission stressed, however, that its arrangements had improved since Winterbourne View. It now has a team of six people to make sure that every whistleblowing call is followed up by an inspector."

The CQC denied shutting down a whistleblowing hotline.

The Commission has previously been criticised for focusing too much on registering healthcare providers and not on inspections.

It emerged that only half the planned number of inspections have been carried out due to a lack of staff.

Mrs Hodge said: "The CQC completed less than half its target number of inspections. That is a serious failure that lets down patients and users of care services who rely on the CQC to protect them from poor or unsafe care."

The Commission now has to register all 10,000 GP practices in England by April next year and the process has been simplified to an online application form in which partners will declare if they meet 16 pre-set standards including cleanliness, medicines management, patient consent, complaints and record keeping.

In pilots a quarter of GPs said they did not meet all the standards.

The report said: "We are concerned, however, that the Commission will simply be a ‘postbox’ for self-certified applications and that the process will not be sufficiently robust to give the public meaningful assurance that registered GP practices are meeting the essential standards."

In a statement the CQC said it was 'on tracl' to register all GP practices and would visit any practice where concerns were raised.

The report also said information provided to the public about the standards of care homes is 'inadequate' and means residents cannot compare services after the star ratings system was stopped in 2010.

Mrs Hodge, said: “The CQC plays an absolutely vital role in protecting people from poor quality or unsafe care, but it has failed to perform that role effectively.

“It has clearly been struggling for some time and the Department of Health, which is ultimately responsible, has not had a grip on what the Commission has been doing.

“We are far from convinced that the CQC is up to the major challenge of registering and assessing 10,000 GP practices this year.

“Unless the assessment of GP practices is meaningful and robust the Commission cannot be sure that basic standards of quality and safety are being met.

“The CQC should not take on the functions of bodies such as the Human Fertilisation and Embryology Authority at this time. It is clearly not ready to do so and needs to focus on getting better at what it already does.

“In the past there was a star ratings system for residential care homes, but this was scrapped in June 2010. People depend on the CQC to help them make informed choices but are not being given a clear picture of care in their area. That is not acceptable and the Commission has got to address the gap left by the removal of star ratings.

“Whistleblowing by staff or patients is a key source of information about the quality of care but the Commission has recently closed its dedicated whistleblowing hotline.

"The Commission still needs to do more to strengthen its whistleblowing arrangements and should reinstate its dedicated hotline.”

Anna Dixon, Director of Policy at think tank, The King’s Fund said: "This report once again highlights the challenges the Care Quality Commission has faced since it was set up in 2009.

"But it is also important to keep this in perspective. The main responsibility for ensuring care standards are met lies with front line staff and hospital boards. We must be realistic about what the regulator can do - its role is to act as a backstop when they fail in this task.

"The Commission had a troubled beginning, exacerbated by a lack of clarity about its role and a failure to provide the resources needed for it to meet the enormous and complex task it was given. Politicians must bear some of the responsibility for this - it is no good preaching the virtues of light touch regulation, and then blaming the regulator for not taking a more interventionist approach when problems emerge.

"It has been open season on the CQC for some time now. While it must address its shortcomings, it is time to move on to a wider debate about how to design a system of quality assurance that patients and service-users can have confidence in."

A statement from the Care Quality Commission said: "We are disappointed that the PAC report, based on last year’s NAO report, does not recognise the significant improvements of recent months.

"The number of unannounced inspections conducted by CQC continues to rise on a monthly basis - 2,400 in January alone. The unique regulatory system we have built is now nearly two years old, and is delivering increasing benefits for people using health and social care services - as well as those whose rights are restricted under the Mental Health Act. Our focus, now and always, is to identify and tackle poor care and protect people who use services."

On whistleblowing the CQC said: "The assertion that CQC “has recently closed its dedicated whistleblowing hotline” is inaccurate.

"CQC has not abolished any whistleblowing hotline – in fact we have recently strengthened our arrangements for dealing with whistleblowers.

"A team of call handlers has been specially trained to deal with whistleblowing calls and is responsible for tracking calls through to a satisfactory conclusion with CQC inspectors. Since this specialist team was set up in June 2011, it has received over 3000 calls."

David Stout, NHS Confederation Deputy Chief Executive, said: "The Committee's recommendations reflect very closely many of the concerns our members have raised about the way the CQC operates.

"We have clearly questioned whether the operation of the CQC was fit for purpose. An effective regulator needs a clear role if it is to earn the confidence of the organisations it regulates.

"As the committee suggests, a clear action plan is needed to change how the CQC works rather than a year zero approach and more organisational upheaval. The CQC and the NHS needs some stability to give the regulator a fair chance of success."